Good morning,

European data releases take centre stage today, with a host of numbers being released from the block. At 09:00 GMT, inflation and unemployment data is released and markets are expecting these numbers to show a very weak economy. The Eurozone, as a collective unit, has been one of the worst plagued by coronavirus and previously described as the hotspot, with analyst expecting to show that quarterly growth has fallen by up to 4%. Unemployment data is also expected to reflect badly on the previous quarter. Looking at the US and their recent record levels of job claims it is hard to see how Europe will not follow a similar path.

Later in the day at 11:45 GMT, the ECB will be releasing their interest rate decision. Rates are still expected to stay flat and not dip into negative territory. However, there are rumours circulating that the ECB could continue their debt purchase measures to now include risky junk bonds. The following press conference will be where the board will reveal their plans for the next quarter and how they hope to lift the economy after the virus peak has passed.

Traders who are keeping tabs on the range-bound GBP/EUR in the hope that the news will be enough to push GBP/EUR from the ranges we have seen over the last week. Markets have been tough to budge from this with some predicting we could see big swings over the course of the day as the impact of Covid-19 has been severely underestimated within Europe. If you have exposure in the currency pair then please do contact your relationship manager to see how we can best mitigate your risk.

Have a good day,

Author: Jack Nicholls, Relationship Manager


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